The OFT's statement reads: "The OFT investigation is exploring whether these games are misleading, commercially aggressive, or otherwise unfair. In particular, the OFT is looking into whether these games include 'direct exhortations' to children—a strong encouragement to make a purchase, or to do something that will necessitate making a purchase, or to persuade their parents or other adults to make a purchase for them. This is unlawful under the Consumer Protection from Unfair Trading Regulations 2008."

There are numerous reports of children running up large bills without their parents' knowledge. Wired.co.uk reported in March on an eight-year-old boy who racked up a bill of £980 (roughly $1500) for virtual donuts on The Simpsons: Tapped Out for iPad. The boy's parents only realized when their monthly phone bill came through, with purchases on it ranging from £1.50 ($2.30) to as high as £75 ($115)—for donuts, remember, that aren't even real.

Apple agreed in this case to refund the bill, a decision that the company usually makes on a case-by-case basis. In the US, Apple was forced into a settlement in a class-action suit brought over what were labeled "bait apps"—if someone could prove that a minor made an in-game purchase without permission from the responsible adult, the money could be reclaimed in either cash or iTunes credit.

That's just a US case, but the OFT's investigation could see a similar case resulting in the UK depending on what evidence is uncovered. The OFT has asked parents to write in "with information about potentially misleading or commercially aggressive practices they are aware of in relation to these games." The contact page is on the OFT's site.

Games companies are also being contacted for information on how they advertise in-game purchases. The OFT's Cavendish Elithorn said: "We are concerned that children and their parents could be subject to unfair pressure to purchase when they are playing games they thought were free, but which can actually run up substantial costs.

"The OFT is not seeking to ban in-game purchases, but the games industry must ensure it is complying with the relevant regulations so that children are protected. We are speaking to the industry and will take enforcement action if necessary."

The report of the OFT's findings is due to be published in October 2013.

82 Reader Comments

Governments should not be in the business of parenting. Period. We're breeding consumers in 1000 other ways, why is this so distasteful? Saturday morning commercials target children. Oh wait, I'm old. Cartoon Network does it 24/7. So do food manufacturers with their pre-packaged garbage. If parents care to be discriminate about their spending and otherwise manage their money well, their children will likely do the same. Government is not going to save our children from an obsession with consumerism.

I should also add that, as a parent, if you're irresponsible enough to not review EVERY app that your child is using on any device - PC or mobile - while at the same time giving them access to your wallet via iTunes or whatever sieve-store it happens to be, you've got bigger problems. There's no replacement for personal responsibility, especially when it comes to parenting and controlling the digital environment that ones children play in.

Governments should not be in the business of parenting. Period. We're breeding consumers in 1000 other ways, why is this so distasteful? Saturday morning commercials target children. Oh wait, I'm old. Cartoon Network does it 24/7. So do food manufacturers with their pre-packaged garbage. If parents care to be discriminate about their spending and otherwise manage their money well, their children will likely do the same. Government is not going to save our children from an obsession with consumerism.

I've noticed a on many FTP/PTP games that their in-app purchase costs seem to be quite inflated compared to what the game offers. I've also noticed how easy it is to accidentally make a purchase on many of these games.

I'm an adult and noticed this so it makes me wonder just exactly what some of these companies intentions really are when it comes to providing their games. Especially games that are marketed towards children and less tech-savvy adults.

Little Diggers on iOS charges $50 for 500 lives (you use 1 life per game, which equates to maybe 16 hours of gameplay). For coins, it costs $25 for 5000 coins, which you could use in 17 games. Games last about 2 minutes. It is pretty outrageous.

Parents will need to learn how to control this. And they'll learn quickly when they get their first inflated bill. If the government wants to help, they could try to help educate parents about the dangers of unmonitored access to their credit card, even though that seems like common sense.

Are AppStore purchases tied to the phone bill in the UK? In the US, I get an invoice a few days after the purchase, so if you just have your credit card on file with Apple, you would get notification a little sooner.

In theory, a free to play game is a wonderful idea. It has no barriers on the poor or rich, young or old, and doesn't bring that feel of regret of buyer's remorse if you end up not liking the game. They're games that typically you can spend a little bit of time on each day, with no obligation to make it your money's worth (because of the lack of a fee). Obviously, these games have to make a revenue somewhere, whether it's an ad or in game purchases. In theory, this shouldn't be bad either and should be a completely optional part of the game that should otherwise not affect how you play the game.

As it turn out, not only do free to play games make it a point to harass you with in game purchases all the time, the gap between the free player and the paying player is growing so big that in some game it becomes near impossible to catch up with paying players without spending a lot of money or a lot of time. As the game gets older, sometimes it's near impossible to get over the new player gap because of all the focus towards late game features.In games where competition isn't a major feature, the app will still try to get your money by making the free experience as dull as possible and will limit your every action until you cough up a few bucks or wait another day.

The free to play games have turned from being the free option to the free to download, pay to enjoy the game. They've turned from being free games with a pay to play option to being online shopping malls that have unlimited candy stores for paying players and virtual treadmills for free players to labor on all day in hopes of catching up or earning enough to enjoy the game.

There's a reason why it's consumed the mmo market and phone app market. It's really easy to trick someone by telling them they're playing a free game, only to pressure them soon after to buy items that the player feels is "worth" their money. It's the same kind of mindtrick that stores use when they list items as 5.99 instead of 6.00Before you would spend 5 bucks for an app, or 15 bucks for a month in a mmo. People now easily spend much more than on these games.

It's basically virtual gambling and virtual spending now, I wonder how far it'll go before it's labeled as a whole new category of addiction.

Edit:Few typos here and there.

Also want to add in that another paying feature of these games are skinner boxes, aka gambling packs. You buy a pack that is advertised with an item that you want (That you can't get anywhere else in game) and the rate of getting that particular item is low (below 1%). If you open one pack, you're likely to get a trash item or an item that isn't what is worth the price of the pack. If you keep on opening up the packs, you might get other prizes, but it will take you anywhere from hundreds to thousands to get the item you want. These packs are usually not cheap either, they can be anywhere from 20 cents for a pack to a dollar or more.

I don't know how common they are in phone app games but in free to play mmos they are everywhere. It's sad too, they are usually unbalanced enough to ruin the game.

I propose that they take a nice long look at Candy Crush. No way to earn the in game power ups, and constantly pestered for money.

Pestered for a large amount of money... I noticed that one powerup was something like $30? And that was just one of several. It would be really easy to rack up a large bill in that game if you weren't paying attention. Especially since there's not a list of costs in the game - you have to click through to the Play Store to see the cost (and at that point it's keyed up for purchase).

The game isn't bad (playing without powerups), but I stopped when they started wanting $0.99 for each set of 10 or so levels. (Or, I could pester Facebook contacts - which isn't going to happen.)

I generally dislike Freemium games but on occasion I find one I like. It's a struggle to not pay money above a certain amount on them (I'm reasonable, not selfish to play and not pay) but I do see many with purchases that exceed $100 which I wouldn't pay for a full-sized PC or console game let alone an app game where that purchase doesn't give you any kind of permanant or often even long term advantage.

I propose that they take a nice long look at Candy Crush. No way to earn the in game power ups, and constantly pestered for money.

Then don't play it.

And if your kids do, don't give them your password. Instead, sit down with them and talk about how to resist the manipulations of advertising and how to make good financial decisions. Compare it to other things you could do with that amount of money. This isn't a government job- you have to step up to the plate and be a parent.

In my experience, MMO only, FTP games actually cost much, much more per month than do monthly subscription games. At this point I won't even try FTP and if a game I subscribe to goes FTP I will quit it immediately.

Yes, this narrows my options significantly. I currently have two monthly subscriptions.

On the one hand you have kids spending thousands of pounds on stupid "Freemium" bait apps like the Simpsons game mentioned. On the other hand you have responsible, reasonable F2P games like Star Trek Online or Lord of the Rings Online. The latter shouldn't be punished for the former, but the former shouldn't be allowed to continue as-is.

Are AppStore purchases tied to the phone bill in the UK? In the US, I get an invoice a few days after the purchase, so if you just have your credit card on file with Apple, you would get notification a little sooner.

They are not tied to the phone bill in the UK or anywhere else. They are on the credit card statement or whatever method the user chose to fund the purchases.

Hell, the original Wired UK article even says they noticed the Simpsons purchases only when they checked their bank bill. I'm not sure why Ars stated it incorrectly.

I really hate these type of games. I think it has been mentioned in Penny Arcade comic where paying a dollar to let the egg hatch now is considered 'gameplay'. And the sad part is it sometimes lock the game play to it - requiring the purchase.

The saddest part is that sometime the game that utilize this is fun. But they killed the gold laying geese too early. If they implement it as a normal game and charge it the usual prices, people have purchased in on the droves and they could easily be the next Temple Run or Tetris. But since they charges the gameplay, people just uninstall.

It's like making a Tetris game where you need to purchase the line or a chess game where you can easily play the pawn and king for free, but to use knight/bishop/rook castle/queen is a dollar per move. Instead of being a multi millionaire by making a game people only pay once and play indefinitely, they made a game people uninstall the moment they start pestering users to buy this and that in order to do this and that.

Apple could do more to police the more rotten Freemium titles. There are _lots_ of good ones out there, and I'll even include the Zynga ones in that; while they pressure you, it's a low-pressure sort of way, and their use of the annoyance factor makes it easier to put the game down and never pick it up again. Charging for level packs is obviously the best use of IAP, it's just the shareware or a paid expansion model.

There are other games that are pretty minimal on the "game" but appear to maximize the whole IAP-induced addiction that Ars has carried several articles on over the years. Start fast but immediately tell you that you need to start buying things, make you grind, dump rewards on you for a bit but dry them on up on level 3 unless you buy Thor's Hammer or whatever.... I can respect Nintendo Hard games, but games that start casual and then screw you, or outright become impossible with perfect play without IAP, are designed to manipulate you into not wasting your time investment and need to be regulated. Especially childrens' games. (I'm not proud of it, but I remember from my childhood what a devestating effect games could have on my emotional well-being. Doing that to a child just to extract a few pence is even more disgusting.)

My personal vote for most annoying Freemium: the new Centipede, which is obviously aimed at kids with the new graphics and gameplay. What a dollar gives you is about 4-5 plays, anyway, just like an old arcade.

I've had a couple of games I paid for upfront go Freemium, and start badgering me for what was included before as soon as I update. (Because no update announcement has ever included "Now includes advertisements and high-pressure IAPs.") Thanks, you cocks, your business deserves to die.

I think it is a good thing, it seems like every app uses this "freemium" model which is just a nickel and dime scam and I am fed up with it.

Things need to get better or I don't see the app model lasting once the huge growth of tablet users start to decline.

As for the first poster moronic comment on parenting and how children should act like responsible adults by managing money. The difference in this case and a TV commercial is that Kids can't press a button and buy that product on their parent's credit card or phone bill.

I also think that how these games work a kid could get confused with these purchases, for example in the Simpson's game used in article you buy doughnuts in real money but the game also uses cash as a in game currency, I could see a kid being confused by that and think they were buying doughnuts with in game cash instead of actual cash.

Most of the apps that use these in app purchases are done IMO in a shady way which is why I think in general it is a scam which the government should look into.

Hasn't Apple altered the way in-app purchases work in such a way that if you don't provide your child with your password they can't spend any money? If that is the case I'd think it pretty much brings this discussion to a halt, at least regarding iOS devices. I can't do much of anything in the App Store without manually entering my password on my iPad.

Not sure about Android. I don't use my phone for games so I'm not sure about how in-app purchases would even work on that device. I would assume that eventually Google could make such a change if it hasn't already.

The easiest way to see an end to the "freemium" model (which I have no problem with as long as the app lets you know up front) would be to stop buying into it.

As for costs, I play a freemium game on my iPad that would gladly allow me to pay upwards of $300 for SINGLE in-game items. I've been playing it for over a year and have yet to give them a dollar because it's designed in such a way that if you're just willing to wait a bit you never have to buy anything, ever. And again, I've got no problem with that - I knew it going in.

And if your kids do, don't give them your password. Instead, sit down with them and talk about how to resist the manipulations of advertising and how to make good financial decisions. Compare it to other things you could do with that amount of money. This isn't a government job- you have to step up to the plate and be a parent.

I'm guessing that you either don't have kids, or are extremely lucky with the kids that you do have. Very few kids will respond to everything that you sit down and explain to them. A few kids will respond to these discussions most of the time, many will respond to these conversations some of the time, and a few will not respond at all.

The big barrier is that you're talking about adult issues, such as good financial decisions and manipulative advertising, with adult consequences, such as not being able to afford the necessities of life. You are also having this conversation in a world where some of their friends will be getting these luxuries, and the child isn't going to understand why they cannot have the same (since this has to do with the world of adults).

Now there are things you can do to make these chats more effective. The child can earn an allowance and pay for their own virtual goods, since it gives them an opportunity to learn about responsibility. When they can't afford something that they want because they spent all of their money, it's a good time to talk about decision making and consequences. (Ahem ... just don't offer them a multibillion dollar bailout.) You can also redirect their attention towards alternatives that are free, have fixed costs, or cost less. Yet, at the end of the day, all of that stuff will only make the chats more effective. It is not a cure-all. It can't be a cure-all because businesses are continually coming up with new ways to make money, some of which are less than upfront. Adults can't keep up with all of these changes. How can we expect children, who have less world experience, to do so?

On Android, it does open up Google Play again for you to enter your password in ... well at least it did the last time I purchased extra levels for Tower Raiders about a year ago. And you definitely should not be giving out passwords to your kids.

On iOS, the password stays resident for X period so I guess a workaround is to turn off/on the device before handing it back to your kids after install.

It had to do with an maliciously designed app called Tap Fish and it's abuse of a child's emotions and lack of perspective to incur a large volume of in app purchases. Kids do not always know the value of money and I honestly believe they are incapable of associating IRL costs while inside a game. It's part of being a kid, you don't see $2 as $2, you see it as another random number in a game filled them. The games also tend to throw constant purchases requests at you and it can get hard to tell the game from the sales pitch.

I hope this investigation bears fruit. If Joe Camel got banned for advertising cigarettes to kids, then some of the Tap Fish like games should to see regulation too!

I propose that they take a nice long look at Candy Crush. No way to earn the in game power ups, and constantly pestered for money.

Then don't play it.

And if your kids do, don't give them your password. Instead, sit down with them and talk about how to resist the manipulations of advertising and how to make good financial decisions. Compare it to other things you could do with that amount of money. This isn't a government job- you have to step up to the plate and be a parent.

Sure - like I said earlier, I quit playing it. But the problem is that it is (could be...) a reasonable game. One that I'd have paid a few dollars for, but instead, they tried to keep asking for money.

My problem is less that I decided to quit, but more that I'm concerned that more and more games will go this way and the whole gaming experience will suffer. (I almost said gaming industry, but sadly I think they'd still end up doing ok)

It had to do with an maliciously designed app called Tap Fish and it's abuse of a child's emotions and lack of perspective to incur a large volume of in app purchases. Kids do not always know the value of money and I honestly believe they are incapable of associating IRL costs while inside a game. It's part of being a kid, you don't see $2 as $2, you see it as another random number in a game filled them. The games also tend to throw constant purchases requests at you and it can get hard to tell the game from the sales pitch.

I hope this investigation bears fruit. If Joe Camel got banned for advertising cigarettes to kids, then some of the Tap Fish like games should to see regulation too!

I remember that one. The guy came off as a total schmuck. Exploiting the ignorance of children was pretty much the only purpose of that app. Every time I see a free to play in app purchase game I always think of that guy. FTP has a bad reputation, and it's too late for regulation to fix that (although regulation is necessary). I don't even bother looking at FTP games cause thoughts like "CHEAP, SCAM, and HASSLE" always come to mind.

In app purchase will always be a great thing for in game expansions, but FTP IAP will probably go the way of Flash games.

[quote="Nihilus"]I think what annoys me most about the android market is that games are not required to declare whether or not they feature in-app purchases in the description./quote]

This.

I think every game that has micro-transactions to be cleared spelled out as having them in the app details in the various app stores. I also agree with the other poster who stated parents should be parents and teach their kids about it. Having honest advertising (i know that's an oxymoron) would be very welcome.

I personally refuse to make micro-transactions or to pay for DLC that isn't a full expansion pack. On the flip side, i will purchase decent games for full price when they are worth it. For example, Final Fantasy Dimensions, which is a full game without micro-transactions. The same applies for PC games which are obviously higher priced than android games, as they should be.

Governments should not be in the business of parenting. Period. We're breeding consumers in 1000 other ways, why is this so distasteful? Saturday morning commercials target children. Oh wait, I'm old. Cartoon Network does it 24/7. So do food manufacturers with their pre-packaged garbage. If parents care to be discriminate about their spending and otherwise manage their money well, their children will likely do the same. Government is not going to save our children from an obsession with consumerism.

Let's think about what's actually happening here: a bunch of lazy parents handed their kids tablets/smartphones to keep them quiet, didn't bother to consider the consequences, and then flipped out when they got hit with a $1,500 bill. Good. Maybe they'll learn something from the experience. These are the same kind of people who plant their kids in front of a TV for nine hours a day because they're too busy/lazy to bother being parents or who think it's just too much trouble to buckle the kid into a car seat for a "quick hop" to the grocery store.

Kids are not just little adults; they don't have the capacity to make judgements like an adult does (financial and otherwise). That's why we have fences around schoolyards and why you hold your kid's hand in a shopping mall. If you're so incompetent as a parent that you think it's safe to give your kid carte blanche access to a tablet with an unsecured purchase account---honestly, this is a relatively cheap lesson in parenting all things considered.

We certainly don't need the government to step in. The credit card bill itself will produce an automatic correction and probably make the parents just a bit more responsible. What's pathetic is that these people still don't acknowledge their own laziness and appeal yet again to the government to insulate them from the consequences of their own actions. That's probably the worst lesson of all for the kids in this whole thing: "when mommy and daddy screw up, don't worry; the government will step in and make everything okay." Who are the real children here again?

Surprised that nobody has commented on the fact that it's the game that induces the kid to spend the big bucks, but it's the store — Apple — that makes the settlement.

Presumably, Apple is taking the hit without finger-pointing to the developers as part of its justification that it rightfully controls what goes on sale. It adds a bit of gravitas to its denial of apps for a host of reasons—permitting apps that are deemed pornographic, unfair-to-consumers, hate speech, whatever apparently directly expose Apple, not some developer, to legal action.

I don't quite get this. As the article says, many of the games with prospectively abusive purchase arrangements are for sale on multiple platforms, making it quite clear that any abuse is by the developer, not (uniquely, anyway) the store.

I am positive that it will find some that break the law. Besides the sheer number of apps, there are many that are impossible to play without buying in app upgrades. Case in point Bike Race. I'm sure everyone has at least heard of that one by now. The only games I personally bought in the game content for has been World of Warcraft and Mini Motor Racing. World of Warcraft is a little different than Mini Motor Racing;that content is purely an indulgence. Although, your first toon will benefit greatly from buying a mount from the Blizzard store, you can get throb the game without doing so. Plus, everything (minus time cards) is a one time thing, but every time, you have to put in your credit card number. With MMR, there are several things you that are pretty much a pure waste of money, but all I felt was worth buying was the couple the earning upgrade. In that game though, it is too easy to buy upgrades. It is just a couple of taps. With World of Warcraft, you have to go to the website and enter a credit card number. I might have spent more with WoW than MMR, but it is much easier for someone else to spend your money with MMR than WoW.

Let's think about what's actually happening here: a bunch of lazy parents handed their kids tablets/smartphones to keep them quiet, didn't bother to consider the consequences, and then flipped out when they got hit with a $1,500 bill. Good. Maybe they'll learn something from the experience. These are the same kind of people who plant their kids in front of a TV for nine hours a day because they're too busy/lazy to bother being parents or who think it's just too much trouble to buckle the kid into a car seat for a "quick hop" to the grocery store.

Just what we need: idiotic smug 19-year olds with no idea how to raise children dispensing parenting advice because *they* would never fall for something like this.

If government is supposed to do *anything* it should protect people from these kinds of abusive schemes...the same way that it protects people from other kinds of scams. Even scams that you or I would probably not fall for.

Look, it would be one thing if parents were losing $10-$15. But when they are losing $1,500+ dollars, this has crossed in to scam-land and, absent any meaningful self-control by the developers, carriers, or phone companies, needs to be policed by the government.

Quote:

Kids are not just little adults; they don't have the capacity to make judgements like an adult does (financial and otherwise). That's why we have fences around schoolyards and why you hold your kid's hand in a shopping mall. If you're so incompetent as a parent that you think it's safe to give your kid carte blanche access to a tablet with an unsecured purchase account---honestly, this is a relatively cheap lesson in parenting all things considered.

Oh, bullsh*t.

I know it makes you feel all superior that you wouldn't fall for this scam, but all it's really doing is pointing out your lack of maturity and understanding of how the world actually works.

Smartphones are used by normal people; the thought would *never* cross their mind that their kid could run up thousands of dollars of charges in 15 minutes while playing a free cartoon game on a phone. And you know what? This should never happen.

Quote:

We certainly don't need the government to step in.

Apparently we do, since no one else with the power to do anything is accepting responsibility.

Quote:

The credit card bill itself will produce an automatic correction and probably make the parents just a bit more responsible. What's pathetic is that these people still don't acknowledge their own laziness and appeal yet again to the government to insulate them from the consequences of their own actions.

Just like those immature people who call the police when they've been robbed.

Quote:

That's probably the worst lesson of all for the kids in this whole thing: "when mommy and daddy screw up, don't worry; the government will step in and make everything okay." Who are the real children here again?

People who believe that parents should lose $1500 to dishonest game developers because *they* would never fall for that?

For everyone talking about educating children, do you understand nothing about child psychology? You can educate teens about budgets and economics. For kids under 7-8 with barely an ability to do basic arithmetic, half-formed minds, and no comprehension of the outside world, you can only tell them NO. Between those ages, when they have some vague idea of how things work but still can't really fit things together, you can explain all you want, but they just won't be able to understand abstract concepts too well. At best, they get a vague notion if they're forced to make painful decisions. This is the age when chores for money and their own Apple account with a prepaid Visa starts to pay off.

Despite all of that, there is so much information on manipulating children (and adults) out there that education barely stands a chance against a ruthless app dev.

This is more of a problem when the phone/tablet is the parent's and they're merely letting the kids use theirs as a toy at times. Unless you remember to turn IAP off in general settings every time (especially if you use IAP yourself), you can be bitten when you install something spur of the moment and hand it over. And this kind of IAP often even makes adults hooked rather than feel like failures, so given the much less stable emotional state of a child, you can see a full on tantrum or bawling over not being able to buy the coins to continue. Pay to Win games are insidious and emotionally devastating to unstable people. They shouldn't be banned, but they should be labeled as such so parents can tell the difference. (Selfishly, I'd also like to know the difference before investing time into anything.)

For everyone talking about educating children, do you understand nothing about child psychology? You can educate teens about budgets and economics. For kids under 7-8 with barely an ability to do basic arithmetic, half-formed minds, and no comprehension of the outside world, you can only tell them NO. Between those ages, when they have some vague idea of how things work but still can't really fit things together, you can explain all you want, but they just won't be able to understand abstract concepts too well. At best, they get a vague notion if they're forced to make painful decisions. This is the age when chores for money and their own Apple account with a prepaid Visa starts to pay off.

I agree completely. A lot of the comments in this thread seem to show that, while you may be able to educate teens about budgets and economics, you can't educate teens about (a) the realities of child-rearing, and (b) the purpose and role of government regulation of fair-trade practices in democratic societies.

There's a fundamental flaw as has been noted - children are not inherently rational (despite economic theories that assume otherwise). Frankly, even adults are not entirely rational.

In game apps are designed to take advantage of this and to encourage impulsive purchases. It's only a few dollars per micropayment, but they add up pretty fast.

If there's in app purchases, I'd rather see this being done in a controlled manner with some accountability than the ad hoc way it's done now, which can lead to bill shock, scams, theft of financial information, etc.

What people should also not do, is under estimate the intelligence of children. Especially if they think they can keep their password secret for a long period of time. You only need to slip up once, and then they have free access.